Great News: Petrol prices have fallen Rs 40/liter!

Petrol prices affect the psychological inflationary number for most middle & lower classes. However, the govt is usually a “price taker” dependent on global oil prices. Brent has fallen from $60sh to $38 today. In May, ex-refinery prices fell month on month while international prices rose. Expect reversal in ex-refinery prices, government should (is) pass (ing) more benefits to consumer but needs to tax adequately for Federal pockets.

Even if global oil prices hover $40sh – & ex-refinery prices increase Rs 10-15/liter – govt should keep the Tax (especially federal bound PDL) at Rs 40-45/liter. Masses are just about fine with Rs 85-90/liter vs Rs 115sh in February. Provided optimum direct cash transfers are made to impoverished keeping job prospects intact.

Or maybe govt wants to keep absolute taxes Rs 35/sh & pass on benefit of Petrol & Diesel prices to keep the businesses/consumption alive because of multiplier effect & tame inflation numbers? Petrol is highly inelastic so a marginally higher tax is a win-win for the country.

Interest rates are down 5.25%, electricity/gas bills waived, principal repayment deferred, cheaper loans available & budget would have incentives. Spare the govt if it taxes petrol slightly more.

Share on facebook
Share on twitter
Share on linkedin

You may also like

What is Capital Market

In an economy, some individuals/ institutions have an idle cash surplus, while some have a cash deficit and are struggling to raise funds, that is

Read More »

Leave a comment

Your email address will not be published. Required fields are marked *

Categories

Recent Blogs

Videos/Education
KASB Securities

What is Capital Market

In an economy, some individuals/ institutions have an idle cash surplus, while some have a cash deficit and are struggling to raise funds, that is

Read More »

Archive

Follow Us